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Addressing changing consumer preferences requires auto players to gear up their user interfaces and business models. The eleventh annual Digital Auto Report is a global consumer survey with a focus on the U.S., EU and China. It consists of a quantitative market outlook until 2035 based on regional structural research and interviews with key industry executives at OEMs and suppliers, leading academics and industry analysts.
Connected services – Share of participants rating feature as important
- Safety and navigation remain the most important connected services features while on-demand functions are on the rise.
- In Germany and the US, the willingness to pay is at ~20€ / month, while it is at ~40€ in China. Experts are more conservative on consumer willingness to pay.
Germany
United States
China
Question: "Which connected service categories are particularly important to you?"
2023
2021
2020
Share of participants rating engine types as likely for next purchase (%)
- Germans are still sceptical towards BEV cars as only 35%of consumers would consider getting one. In the US, there is more openness with ~50%
- Chinese consumers exhibit opposite preferences with BEV being most popular before hybrid and ICE engines
Germany
United States
China
Question: "Assuming you wanted to buy/ lease/ subscribe to a passenger car, how likely are you to consider the following types of engines?"
Age bracket
18-34yo
35-54yo
55+yo
Automated driving – Consumer attitudes
- 60 – 70% of German and US respondents are sceptical towards L4 automated cars while in China, there are only 15% sceptical consumers
- Willingness to pay for robo- vs. driver-driven taxis is lower in the US and China compared to Germany. Younger Germans are willing to pay more than older Germans
Question: "How comfortable would you feel using an autonomous vehicle (Level 4)?"
Very comfortable
Rather comfortable
Rather not comfortable
Not comfortable at all
Top 3 contributions to CO2 reduction
- The purchase of a new or used car is still the preferred option, although car subscription models are gaining traction
- In Germany and China, respondents want to contribute to CO2 reduction – mainly by more walking/cycling and using public transport
Implications for auto players
1. Getting the user interface right
The relevant market for automotive players is expanding beyond the car itself – maintaining user access is therefore crucial and business models need to be redefined to meet human-centric mobility needs. Successful mobility ecosystem players are clear on four key topics:
- Experience differentiators: Getting the digital interface right means creating a differentiated experience along heterogeneous customer needs
- Portfolio scope: A value creating digital service portfolio requires automotive players to balance multiple trade-offs
- Monetization levers: Digital services unlock value beyond direct user monetization – along the value chain and vehicle life-cycle
- Value chain integration: OEMs are forced to partner with technology players to deliver compelling digital services – with risk of loosing control
2. Rethinking selling vehicles
As alternative ownership models such as subscription emerge, OEMs need to gear up their vehicle lifecycle management skills. In general, alternative ownership models need to create a win-win situation for customers and OEMs. Currently, they mostly pay into the strategic agenda of OEMs. For future flexible ownership models, strong customer centricity and efficient asset management leveraging used cars is needed to overcome profitability challenges of existing offerings.
OEMs may leverage their existing retail network and preferential vehicle acquisition conditions as differentiator to start-up competitors.
3. Going beyond the vehicle
The rise of e-mobility provides ample opportunities to capture value beyond the vehicle – e.g. along battery and charging. For the successful realization of bi-directional charging use cases, the infrastructure and vehicle penetration are key requirements. The front-of-meter prosumer use cases depend on a multitude of external factors limiting mainstream adoption in short term. In order to realize and scale them up, they require efficient stakeholder coordination and management of their fears.
A holistic ecosystem approach beyond core business is key to succeed in the future
Akshay Singh, Steven Jiang, Kentaro Abe and Milos Bartosek also contributed to this report.
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